federal and state tax policies in the united states offer substantial incentives to donate to charity. The federal income tax and most state income taxes give taxpayers the choice between an itemized deduction for expenditures such as charitable donations, mortgage interest , and state and local taxes, or a standard deduction, which at the federal level amounts to $12,200 for married taxpayers ...

Researchers frequently studied the casual relationships of other-regarding preferences by applying experimental methods in bilateral settings (e.g., dictator game and ultimatum game). We use a framed experiment on taxes to study preferences for redistribution in a multi-person setting. We find presence of heterogeneous preferences with a substantial share of tax rate choices in line with both p...

Previous work on the effect of taxes on foreign direct investment (FDI) focused primarily on capital income taxes. We investigate the proposition that other forms of taxation may also deter FDI. We use tax ratios, i.e., average effective tax rates, on consumption, labor and capital income for a panel of 25 OECD countries from 1975-2006. We find that increases in relative tax rates on capital in...

The new children’s allowances1 (“child benefit”) program in the United Kingdom recently completed its 3-year phase-in period, begun in 1977. The new program is the first major reform of family support since the introduction of children’s allowances in 1946. It merges two kinds of allowances that previously benefited families with childrenthe taxable social security cash payments made to all fam...

In terms of changes in the incomes of age groups, the 1984-89 period was very different from the periods that immediately preceded it. This summary focuses on changes for aged family units. During the 1984-89 period, the rate of growth of real median income of aged units was substantially lower than in other subperiods since 1967, the first year for which comparable detailed estimates are avail...

Trends in the distribution of family disposable income in Australia over the last two decades are examined using the unit record files of the ABS Income Distribution and Income and Housing Costs surveys. The effects on income inequality of government intervention, in the form of provision of transfers such as pensions, benefits and allowances, and through personal income tax, are also investiga...

We study optimal income taxes and transfers in an economy with heterogeneous agents and aggregate shocks. An optimal equilibrium determines agents’ net asset positions, but not their absolute levels. The distribution of debt holdings across agents influences optimal allocations and taxes, but the level of government debt does not. Higher correlations of debt holdings and labor incomes imply mor...

Despite a recent flurry of empirical research on the effects of taxes on small business activity, state-level taxes faced by entrepreneurs have been overlooked by most of the existing literature. Using a 50-state panel of tax policy information spanning the years 1989 through 2002, our analysis reveals that state tax policies generally do not appear to have quantitatively important effects on e...

How should the government design optimal income redistribution when individuals work to signal their skills to employers in the labor market? To address this question, I introduce labor market signaling into a Mirrlees optimal income tax environment. The signaling incentives create a wedge between the private and social returns to labor, with the private returns exceeding the social returns. Be...

This chapter analyzes the public provision of higher education subsidies. When voters have a positive utility from the share of college-educated among the young, they may decide to vote for subsidies for students which increase the number of college students. These subsidies are paid for by income taxes that reduce the amount of consumer goods voters can purchase. There are a group of credit-co...